Natural gas
No one on Capitol Hill or Wall Street is debating the fact that natural gas is a cleaner alternative to crude oil. Nor are they denying that America is chock-full of it.

But if the economics (and economic incentives) don't make sense for both businesses and consumers, it's unlikely we'll ever see a shift toward natural gas.

The potential amount of savings to both industry and consumers from that shift are often overlooked in discussions about energy policy, taking a back seat to more tangential issues like ground contamination, air pollution, etc.

But a new paper from Yale is drawing attention to exactly how much even a small shift toward natural gas would save consumers. And it has the potential to spark the natural gas revolution.

Small Change Equals Big Savings

The authors conclude that replacing just 7% of the oil used in the U.S. each year with natural gas would save consumers $25.6 billion a year.

That works out to $130.61 per licensed driver every year.

The number is meaningful, but remember: That's generated by replacing only 7% of oil used with natural gas.

If half of the current amount of oil used was replaced with natural gas, you're looking at $182.9 billion a year, or nearly $1,000 per year per driver.

That's $1,000 each driver could either sock away in an emergency fund, invest toward their retirement, or spend on items they've been eyeing (returning it directly back into the economy).

So Why Isn't This Happening Yet?

This shift toward natural gas won't happen unless both consumers and businesses can reap the benefits. So although the savings to consumers are substantial, that doesn't mean businesses will jump on the bandwagon.

There are billions of dollars worth of infrastructure investments necessary for this to take place -- and these investments don't make sense unless there is (or with reasonable certainty will be) a critical mass of consumers willing to make the shift to natural gas.

That's why so many energy companies have spent millions of dollars on lobbyists, working on their behalf to petition for handouts to offset the costs of these investments.

But because the federal government is so pressed for cash these days with more than $15 trillion in debt (and raising taxes is never an easy sell), this money must come from somewhere else -- often programs they've already cut back on.

So will the change to natural gas and these savings be something we see soon? It remains to be seen. But if it does come, you can rest assured that you'll be paying a lot less at the pump -- and everywhere else.

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14 Comments

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cindy8556

Makes no difference if people switch to natural gas for home heating or to fuel their cars. As long as its traded in the commodities market the price will be manipulated. Comex destroys the competition. If everyone is shopping in the same place for the same thing, the price will go up. If you need it and have to have it you will pay dearly for it. Notice how the price of oil will go down 20% but the price of gas only drops 2%. Gas is thirty cents a gallon more now than it was when Oil was $147.00 a barrel.

August 06 2012 at 3:37 PM Report abuse rate up rate down Reply
Matthew

Something needs to give! Gas is way too high! Gas should not be over $2.61 per gallon right now! I've done the math. It's .78 per gallon too high where I live. I'm tired of giving all my hard earned money to the gas companies! I'm all for a lot cheaper alternative at the pump, but how can we afford to buy new natural gas automobiles? Exxon has all my money.

August 05 2012 at 10:36 PM Report abuse rate up rate down Reply
1 reply to Matthew's comment
j.doobie

I'm sick of paying bloated gas taxes at the pump too. That's why the government loves the higher gas prices, it keeps them in wasteful spending mode.

August 06 2012 at 8:19 AM Report abuse rate up rate down Reply
2 replies to j.doobie's comment
jdykbpl45

Blame Obama and the democrats. They hate this countrry's being energy independent.

August 06 2012 at 10:09 AM Report abuse +3 rate up rate down
j.doobie

I do.

August 06 2012 at 11:03 AM Report abuse +1 rate up rate down
bingogeorge4

The artical mentioned there would be billions of dollars worth of infrastructure necessary for the shift to natural gas as a fuel for vehicle.
Hello----We already have the infrastructure in place in America.
(After conversion of your vehicle to run on CNG) Install a small compressor in your garage that is hooked up to your existing natural gas line that fuels your home furnace.
Just hook up and refuel your vehicle.

August 05 2012 at 8:10 PM Report abuse +1 rate up rate down Reply
1 reply to bingogeorge4's comment
hb341

"(After conversion of your vehicle to run on CNG) Install a small compressor in your garage that is hooked up to your existing natural gas line that fuels your home furnace."
That is infrastructure investment. As well as requiring all gas stations provide at least 1 CNG filling port. Just saying...

August 10 2012 at 2:05 PM Report abuse rate up rate down Reply
gcup

"discussions about energy policy" ???? What energy policy? There has not been an energy policy in this country since Ronald Reagan was elected president. He pretty much shut down any movement toward energy dependence, and there has not been a president or congress since that has the stomach to actually development a national policy that sets the country on an energy course for the future. We just flounder from one fad to another.

August 05 2012 at 2:20 PM Report abuse rate up rate down Reply
kak714

How much do you want to pay for money? Think about it. What are you willing to give up to have an extra $1k in your pocket- your air, your water, your home value, your insurance (nationwide is NOT on your side in this one), your health, your kids future, your democracy (see PA Act 13)? The one thing about the cost of $money$, the amount we pay is always in priceless things. As far as T.Bone(d) he is wants $5B of tax payer money to pull off his Pickens Plan. Natural Gas is a bridge fuel to NOWHERE- more like a fool's bridge.

August 05 2012 at 8:21 AM Report abuse -1 rate up rate down Reply
2 replies to kak714's comment
j.doobie

How about Obama's high speed rail fiasco . That's a real joke

August 05 2012 at 8:29 AM Report abuse +2 rate up rate down Reply
j.doobie

So eliminate the DOE and use that 42 billion to fund it, Obumma has no energy policy at all. America has enough energy here already, all we have to do is use it.

August 05 2012 at 8:32 AM Report abuse -1 rate up rate down Reply
FCI Fincl Serv

When Ronald Reagan was elected President, he cut all goverment funding for research in alternative energy sources. His energy nearsightedness cost the United States dearly and made us more dependant on foreign energy sources. We lost 30 plus years of time researching and developing alternatives to "big oil"! "Dutch" Reagan was in bed with big oil and it cost us dearly!

August 04 2012 at 9:34 PM Report abuse rate up rate down Reply
2 replies to FCI Fincl Serv's comment
j.doobie

Reagan is dead, not to mention that T.Boone Pickens has already submitted a great plan to Capitol Hill,three years ago for the future of natural gas. So what's this administration doing about it ?

The Department of Energy is an abysmal failure with a bloated staff of 16,000 and 42 billion dollar annual bill to the American taxpayers in exchange for more dependency on foreign oil,and more obstruction for drilling nation wide.

August 05 2012 at 7:24 AM Report abuse +2 rate up rate down Reply
j.doobie

Hey FCI, did you know that Exxon / Mobil is the the leader in research and development of alternative energy, see the pattern yet ? Besides in the past 40 years every president has been in bed with big oil. You need to pull the wool away from your eyes so you can see the real picture.

August 05 2012 at 8:04 AM Report abuse +2 rate up rate down Reply